The new rules will wreak havoc on all webcast operations. Internet webcasters, whether they play all-Indie, "unsigned" artists or "major label' music will have several problems.
First, the CRB ruling mandates that ALL webcasters will still have to adapt to the new reporting methods of supplying music logs/playlists for two weeks out of every quarter - no exceptions. A major hassle, an expensive one to do and, now, a must for all webcasters (outside of terrestrial radio stations.)
The CRB ruling mandates the royalty fees are payable to Sound Exchange to subsidize Labels and Artists (performers) whether they are signed by a major label or not. Any music played counts. This is a "performance" fee/royalty to labels and artists, not the usual "composter/publisher" royalty fee paid to ASCAP, BMI & SESAC.
In other words, you play it, you report it...or you don't broadcast.
Second, the offshore idea will not work, either, as the "origination" stream -- if it comes from the US or is distributed back to a "US audience" - including advertising geared for US listeners, will allow the shutdown of streams through the US Internet provider, effectively blocking the webcast, no matter where it is broadcast.
Without a record of what is being played and submitted to SoundExchange, royalties and fees of the country launching the broadcast will also have to be paid...an even more expensive proposition.
Tough to get around these rules.
There are, as you may be aware, webcasters in Europe that are only allowed to stream inside their own countries after paying the performance right fees applicable to their own countries, which is why a great number of international streams can't be heard here. There are many British webcasters caught in this trap and broadcasting only to their respective territories but not to the USA, without paying the American royalty fees, which many don't.
Third, if the stream is operated out-of-country, then international copyrights (be it in Canada or elsewhere) will have to be paid by the streaming webcaster.
Fourth, terrestrial FM & AM stations, including HD2 stations that stream are still exempt from paying the new royalty fees, while sole-webcasters have to pay from 300% to 1200% higher rates than before. Terrestrial radio pays composer/publisher royalties only.
Finally, and most important ... the RIAA, SoundExchange, the major labels are very powerful with technology, deep pockets and very high priced legal counsel.
Despite how listeners respond with outrage to the Copyright Royalty Board decisions, unless Congress makes new mandates to block the newest decision, the fees for last year and this year are to be collected on May 15th. The higher royalty fee goes into effect on that date, with the old calculation (with the new rates) effective on an "Average Listener Hour" (as it is now) until year end.
Then, the new formula of every song for every listener royalty fee goes into effect.
The paperwork rule is now in effect, as well.
It will take more than petitions and prodding of legislators in Congress on this issue (though it will help.) The key, should this go to the US Court of Appeals in the District of Columbia will be HUGE $$$$ for legal counsel, to meet and match that of the "other side."
To that, the Court of Appeals may not even accept the case.
Congress is going to have to step in and within a month to block this ... but that is a slim chance. The chance that an Appeals Court would reverse the CRB Ruling is even slimmer.
This is a bad precedent and an unfortunate one.
Even the biggest webcasters are affected by this ruling, including Yahoo! Music, MSN, AOL, Live365, Radio Stations (that won't want to pay any higher rates to stream) and many many small-to-large webcasters including Pandora, Radio Paradise, Kurt Hanson's online stations and more.
May 15th, without the help of petitions, monetary efforts and willing a willing Congress will be the "Day the Music Died" (again) on the Internet.
A shame.
